The Biology of Business

The Biology of Business


Long ago, humans realized that living things
are made of cells. Moving, replicating, blobs of water, which,
when arranged just right, produce a bigger blob that moves, and replicates, and makes
YouTube videos. And then a biologist boarded a boat called
the Beagle to better understand the beaks of birds. He noticed that islands rich with seeds were
home to short-beaked birds, And where fish were far and wide, so too were
beaks. And since birds don’t change beaks like
humans and hats, he had discovered natural selection. But this study of how incredible living organisms
emerge from very simple, microscopic things is really a story of economics. Wherever resources are limited, the same basic
laws apply – whether in ants, plants, or Fortune 500 companies. Living organisms are running economic simulations
that can help answer some of our biggest questions. This is the Biology of Business. The goal of a business, like any organism, is to stay alive Yet they’ll set up camp even in the darkest,
dirtiest places. So why live in the extreme cold? And why buy and sell human organs when there’s
easier money to be made? Because economic laws make these places desirable. If there are too many penguins, they starve
and recover until a sustainable number is reached. In extreme environments, that number is very
low. So it might suck to live in the Antarctic,
but there’s so little competition that it’s worth adapting. And as long as there’s demand for corrupt
and distasteful services, so too will businesses be willing to provide them. That’s because prices naturally rise until
someone will make a deal, and someone always will. And in every environment, organisms have different
strategies for survival. Rats and mice are really just genetic batons,
passing on their genes as quickly as possible to many children. No need for private rat school, they play
the numbers game, betting that at least one will be successful. Elephants prefer to invest in just a few children,
which they gestate for nearly two years. And companies are no different. Many see Amazon as disorganized, this week
announcing a phone designed for… no-one? and next a button for buying pop tarts. And others think Apple is too slow at entering
markets and adding features – putting their eggs in so few baskets. But these aren’t failures of management,
just different strategies for survival. Amazon takes the mouse approach of trying
a bunch of products in hopes that some will succeed. Apple is the elephant, investing very heavily
in only a few products, which are late to enter the market. But surely not all strategies are equally
efficient, so which organism will win the game of evolution? And what does the perfect business look like? Well, there’s no finale to evolution because
as the environment changes, so too does natural selection. And the features that make a good species
in one environment are detrimental in another. There will probably never be a single, all-powerful
Buy-N-Large corporation because different markets require different adaptations. It’s easy to think
of evolution as a force that needs no controlling, that better businesses and species will thrive
naturally. But evolution is blind to all but one fact:
does this gene increase or decrease the chance that its host will reproduce? It doesn’t know if it also hurts the group
as a whole. Irish Elk are a good example: Bigger antlers
attracted more mates, which began an evolutionary arms race of all antlers getting bigger. But what evolution didn’t know was how much
of a burden these huge antlers would become. Every elk would be better off if all their
antlers were half as big, but no individual elk could do so and still find a mate. Likewise, market forces can shape businesses
in a way that hurts everyone but no individual business could resist and stay competitive. All of this means that you are guided by markets
like ants are guided by evolution. But it also means we have millions of accidental
economic experiments in nature, just waiting to be explored. As much as I love reading, I’m always frustrated
by how little content can be in such a large book. Authors are pressured to write longer books,
so they take their ideas and add as much fluff as possible. And even a short book can be hard to get through
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About the Author: Oren Garnes

100 Comments

  1. Huge thanks to Patreon supporters: https://www.patreon.com/polymatter who are currently discussing this video on Discord (Come join us!)

  2. I have never seen more unique style of videos, from animation to the video idea, I mean biology of business only yoi can think of that kind of video ideas

  3. Comparing business to biology is something I haven’t thought about, but it sounds very interesting. Thanks for the great video!

  4. Reading is a journey … a view of many mountains and rivers … rather than a concise description of what a a mountain or river looks like. A summary takes out the fluffy journey and gives you the instant destination.

  5. Just found your channel, watched a few video's, WHOW! I have been missing out. Nice quality, not too long or too much filler. +1 Subscriber 😉 (I'll be back to watch your backlog)

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  7. I think a good example of the unnecessary arms race in business is in the amount large businesses spend on advertising, especially in the B2C space, if a businesses put all the money it used for advertising (creating perceived value) into product development (creating real value,) innovation would skyrocket.

  8. Only issue I have with this video essay is that businesses sole purpose is not survival but profit. It's an interesting comparison but not a perfect analogy.

  9. This is brilliant. I have always thought of economy similar to evolution, both dependent on Chaos Theory. Glad to see someone else has the same convictions. Keep up the great work.

  10. Your content is some of the best i have seen, and channels like yours make incredibly difficult topics interesting and digestible for everyone. And i have no doubt your subscriber count will soar to millions :))

  11. It would be cool if you made a video about the economic circuit. I think it is a very easy concept few people ever ear about, and your style of animation is really adapted to it.

    I have this video, but it is in French. https://www.youtube.com/watch?v=06DnEsZJt9M

  12. You're doing excellent work. I see people congratulating you on reaching 100k subs but now you're already at 158k. Hope you reach the 200k mark soon.
    Best of luck!

  13. Very interesting. I actually think the framework of biological evolution can be applied to a lot of disparate fields. Language, economies, cities. This channel is fantastic. I wish you every success.

  14. Very interesting. I actually think the framework of biological evolution can be applied to a lot of disparate fields. Language, economies, cities, culture. This channel is fantastic. I wish you every success.

  15. Interesting comparison. Both markets and biology are also examples of spontaneous orders. https://www.youtube.com/watch?v=yQhqZ-iWMRM

    One correction to be made though. A business' goal is not to "stay alive". Every business has investors. If a company is taking what the investors consider to be a terminal dip, they will cut that company's life short to prevent losses. The goal of a business is to optimize profit and nothing else. Sometimes the right thing to do to optimize profit is to cease operating entirely, and shift their resources to some other business or industry.
    https://www.youtube.com/watch?v=VFY2aJwpdNM

  16. Your content and understanding of the subjects are so well thought out. Keep it up, youre going places!

  17. The last part is a really important message: Naturally, businesses will simply compete for survival even if it means doing things that are harmful (aka pretty much all corporations right now). Those businesses can't change for the better until the same restrictions are applied to everyone. This is why it's important to regulate companies and force them to do environmentally and socially responsible things – because none of them, no matter how good the people within them, can survive doing these things by themselves.

  18. that blinkist plug is the first end-of-video sponsor I've ever watched on any channel, it actually sounds pretty good and worth looking into. cheers!

  19. Read the book. Blinkist is bullshit. You miss out the author's POV. Summarization of the book is the worst intellectual nightmare you can experience.

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  21. Still, a free market is not Darwinian; in business one only makes decisions that are mutually of value, one is not eaten as prey. In biological terms, a free market consists only of mutualistic symbiosis.

  22. I'm glad you mentioned that there is no final goal of evolution. That is something I didn't understand until recently, but I now find it essential and irreplaceable

  23. You either have to have a really high IQ or really high in LSD or some brain enhancement hallucinogen to think like this…

  24. Economics is just another aspect of nature no different from say the weather, time, or evolution. The same way animals adaptions over the course of hundreds of years leads to eveolution is the same way we as people make incremental contributions to society that leads to innovation. That innovation is the only way we progress as a people. Because death is certain, we all accept the fact that we cannot control time. But because there’s no equivalent to death in economics we continue believe we can manipulate the economy. And when crashes like the recession happen due to government meddling in the free market we blame the private sector. Smh. If we accepted the simple idea of economic evolution the very idea of government would fall by the wayside.

  25. The point of big antlers is to show that he can survive despite that disadvantage, this proof that he has good genes.

  26. The solution to the antlers problem is targeted taxation on things that society doesn't want to make them unprofitable. Ex: International CO2 tax

  27. Wow, that was it? You didn't even run with your idea after that advertisement.

    I would hate the free market too if I sucked at selling ideas as much as you.

    Look, while it is true that, say, an elk would grow pathologically large antlers for a mate, that only explains one side of the evolutionary coin.

    You have only described sexual selection in elk; but have failed to describe the natural selection that comes after that. If the elk grows too large a set of antlers, their life expectancy on average is lowered (it is hard to run away from predators). So while on one hand there is indeed a pathological evolutionary force, there is an equal & opposing force that favors quality. It's almost like Newton's third law.

    But if you leave half of the equation out, it is easy to draw incorrect and irrational conclusions about the free market.

    If there was only one, negative, side of the evolutionary coin, you wouldn't even exist.

  28. 3:05 — antlers are a great example of cost signaling. If you can afford to put so many resources into growing bigger antlers and still survive, then you're probably a pretty robust organism. This robustness is genetic, which means it's heritable, which means you can pass it on to your offspring, which means your offspring are very likely to survive. Your potential female mates are looking for the male who will have the most surviving offspring. Therefore, showing that you can get away with waste and still thrive is highly attractive.

    The modern human equivalent of this is conspicuous consumption. When you buy a flashy car for twice the price of a modest car that would have served all the same purposes, or when you buy a house with twice as much space as you need, or when you treat your date to a dinner that's twice as expensive as a dinner that would have tasted just as good, you're performing cost-signaling. You're basically flaunting the fact that it's so easy for you to acquire resources that you can afford to waste some and still thrive.

  29. A real life example of market controlling demand regardless of overall benefit could be arms race between countries. It's usually expensive for them to stock up on weapons but they have to because others are as well.

  30. He said Antarctic but put “North Pole.” I’m gonna assume it was a mistake. If not then 👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏 you won the idiut awerd!!!

  31. I think this can also be applied to politics with political systems and ideologies since they are all just governing-bodies with different survival strategies.

    Today the ressource-rich dictatorships are stable and the educated democracies are stable.

    Dictatorships rely on ressources to pay the insitutions that keep them in power.

    Democracies rely on public support so they use education to control public interest.

    (#RulesforRulers)

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